Oklahoma Consumer Litigation Funder Bond: A Comprehensive Guide
August 9, 2021
This guide provides information for insurance agents to help their customers obtain Oklahoma Consumer Litigation Funder Bonds
At a Glance:
- Average Cost: Between $500 to $2,500 per year based on the applicant’s credit
- Bond Amount: $50,000
- Who Needs it: All consumer litigation funders operating in Oklahoma
- Purpose: To ensure the public will receive compensation for any damages should the consumer litigation funder violate licensing law
- Who Regulates Consumer Litigation Funders In Oklahoma: The Oklahoma Department of Consumer Credit
Background
Oklahoma statute 3-809 requires all consumer litigation funders operating in the state to obtain a license with the Department of Consumer Credit. The Oklahoma legislature enacted the licensing laws and regulations to ensure that consumer litigation funders engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, consumer litigation funders must purchase and maintain a $50,000 surety bond to be eligible for licensure.
What is the Purpose of the Oklahoma Consumer Litigation Funder Bond?
Oklahoma requires consumer litigation funders to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the consumer litigation funder fails to comply with the regulations set forth in Oklahoma statute 3-814. Specifically, the bond protects the public in the event the consumer litigation funder engages in any acts of fraud or pays out referral fees. In short, the bond is a type of insurance that protects the public if the consumer litigation funder breaks licensing laws.
How Can an Insurance Agent Obtain an Oklahoma Consumer Litigation Funder Surety Bond?
BondExchange makes obtaining an Oklahoma Consumer Litigation Funder Bond easy. Simply login to your account and use our keyword search to find the “consumer” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
Is a Credit Check Required for the Oklahoma Consumer Litigation Funder Bond?
Surety companies will run a credit check on the owners of the consumer litigation funding company to determine eligibility and pricing for the Oklahoma Consumer Litigation Funder bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the Oklahoma Consumer Litigation Funder Bond Cost?
The Oklahoma Consumer Litigation Funder Bond can cost anywhere between $500 to $2,500 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $50,000 bond requirement.
$50,000 Consumer Litigation Funder Bond Cost
| Credit Score | Bond Cost (1 year) |
|---|---|
| 680+ | $500 |
| 625 – 679 | $750 |
| 575 – 624 | $1,875 |
| 450 – 574 | $2,500 |
How Does Oklahoma Define “Consumer Litigation Funder?”
To paraphrase Oklahoma statute 3-801, a consumer litigation funder is a business entity who provides loans to consumers while they await the results of a pending legal case.
How Do Consumer Litigation Funders Apply for a License in Oklahoma
Consumer litigation funders in Oklahoma must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application form for details on the process.
License Period – The Oklahoma Consumer Litigation License expires on December 1 every two years and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Consumer litigation funders must purchase and maintain a $50,000 surety bond
Step 2 – Complete the Application
All Oklahoma Consumer Litigation Funder License applications should be mailed to the following address:
Oklahoma Department of Consumer Credit
629 NE 28th St
Oklahoma City, OK 73105
License applicants must complete the application in its entirety, and submit the following items:
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- Military service verification (if applicable)
- Company formation documents
- Affidavit verifying the applicant’s lawful presence in the US
Consumer litigation funders must pay a $290 fee when submitting their application.
How Do Oklahoma Consumer Litigation Funders Renew Their License?
Consumer litigation funders should mail their completed renewal application, including a $580 fee, to the following address:
Oklahoma Department of Consumer Credit
629 NE 28th St
Oklahoma City, OK 73105
The Oklahoma consumer litigation license expires on December 1 every two years and must be renewed before the expiration date.
What Are the Insurance Requirements for the Oklahoma Consumer Litigation Funder License?
Oklahoma does not require consumer litigation funders to purchase any form of liability insurance as a prerequisite to obtaining a business license. Consumer litigation funders must purchase and maintain a $50,000 surety bond.
How Do Oklahoma Consumer Litigation Funders File Their Bond?
Consumer litigation funders should mail the completed bond form, including the power of attorney, to the following address:
Oklahoma Department of Consumer Credit
629 NE 28th St
Oklahoma City, OK 73105
The consumer litigation funder surety bond requires signatures from both the surety company that issues the bond and a representative from the funding company. The surety company should include the following information on the bond form:
- Legal name of entity/individual(s) buying the bond
- Surety company’s name
- Date the bond expires
- Date the bond is signed
What Can Oklahoma Consumer Litigation Funders Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, consumer litigation funders in Oklahoma must ensure that they follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Do not pay or accept referral fees
- Do not advertise false or misleading services
What Other Insurance Products Can Agents Offer Consumer Litigation Funders in Oklahoma?
Oklahoma does not require consumer litigation funders to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Oklahoma Consumer Litigation Funder Customers?
Oklahoma conveniently provides a public database to search for active consumer litigation funders in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
